Geldregen oder mieser Deal?: Abfindung annehmen oder ablehnen? Das müssen Sie wissen

When a company offers its employees a dismissal contract with severance pay, it's usually because they want to end the working relationship amicably instead of going through the hassle and potential expense of a termination claim. Both parties mutually end the employment relationship through the dismissal contract, which is different from a unilateral termination.

Employees can accept, reject, or negotiate the terms of the offer, as they are often provided by the employer. The severance pay is meant to compensate for the loss of employment. The amount of severance pay is negotiable, unlike any statutory requirement. Industry experience multiplied by salary multiplied by a factor can serve as a guideline, with the factor reflecting the risks and chances both sides face in a termination protection proceeding.

If risks are fairly balanced, the factor is usually between 0.5 and 0.7, but it can go up to 1.0 or higher if termination risks are high, and vice versa. The severance pay does not land directly in the employee's account; the employer must withhold income tax from the amount paid in the payment month, potentially leading to a partial refund in the following year.

Whether social security contributions apply also depends on the contract: if it explicitly states that the severance pay is for the loss of employment, no contributions are due. However, employees should also consider the consequences for unemployment benefits: signing a dismissal contract typically results in receiving unemployment benefits only after twelve weeks of unemployment, and the Arbeitsagentur reduces the duration of unemployment benefits by a quarter in such cases.

Older employees with a claim to 24 months of unemployment benefits would lose six months of unemployment benefits. The negotiation doesn't stop at the money. The more aspects discussed, the better, but it's not always the best solution. Aila Kruska, an outplacement and career consultant from Frankfurt am Main, advises employees to negotiate everything they find important and beneficial.

This may include the termination date, job security, outplacement counseling, and even special termination rights, such as the right to resign more quickly if a new job is found.